Disney gains immediate operational control of Hulu, with full $9.2 billion buyout by 2024

Posted:
in General Discussion edited May 15
Disney is taking control of Hulu, an announcement on Tuesday advised, with Comcast agreeing to a deal to provide operational control of the streaming service to Disney, as well as to sell its stake to the media giant for at least $9.2 billion within the next five years.




In a major agreement that is likely to cause waves in the streaming video industry, Disney has been granted control of Hulu's operations effectively immediately. Disney will be able to manage the service's daily operations, plans for growth, and all other areas, without having to make any concessions to Comcast.

Under the deal, Variety reports Comcast NBCUniversal will continue to hold its 33 percent ownership in Hulu as normal, but from January 2024 onwards, it can require Disney to buy its stake. On the same schedule, Disney will also be able to demand the stake be sold to it for a fair market value.

While the sale of the stake in 2024 will be "assessed by independent experts" to determine its fair market value, Disney has guaranteed a sale price of at last $9.2 billion.

Under the deal, NBCUniversal will continue to license content to Hulu until late 2024, and will have the right to pull back programming exclusively licensed to Hulu from 2025. It will also have the right to cancel most content-licensing agreements it has with Hulu by 2027.

Comcast has also agreed to distribute Hulu on its Xfinity X1 platform, and to extend the carriage agreement for Hulu's live TV service for NBCU channels until late 2024.

While the deal does provide Disney with increased ownership of Hulu down the line, as well as immediate control of the company, this is only the most recent change in its ownership share. In April, AT&T sold its 9.5 percent stake to Disney and NBCUniversal for $1.43 billion, with the shares distributed between the two companies on a pro-rata basis, ending up with Disney having a 66 percent ownership to Comcast NBCUniversal's 33 percent.

The deal is the latest in efforts by major media outlets to offer their own streaming services to consumers, and the consolidation of power for Disney since it completed its $70 billion acquisition of Fox assets in March.

NBCUniversal is anticipated to launch its own streaming video service in 2020, one which is thought to include content from major studios including Steven Spielberg's Amblin, Dreamworks, Focus, Illumination, and Working Title. To set up the service, NBCUniversal is likely to pull content from its competitors, such as Netflix, to try and gain more exclusivity and a reason for consumers to sign up.

On the Disney side, it will be launching its Disney+ video streaming service in November, including a wide and diverse catalog of movies, TV shows, and original content. Gaining control of Hulu's operations and the future total ownership of the service gives Disney far greater overall control of the streaming market.

Comments

  • Reply 1 of 20
    mac_128mac_128 Posts: 3,449member
    Yeah, Comcast is not likely to keep any of their content on Hulu after the deal expires. Interesting deal. I wonder how much effort Disney will put into retooling Hulu over the next four years considering Comcast will be taking 33% of the profits, knowing that Comcast is likely pulling its content as soon as it can?
  • Reply 2 of 20
    SpamSandwichSpamSandwich Posts: 31,309member
    Disney making some seriously aggressive moves into streaming. Wish Apple had made more aggressive moves earlier.
    1STnTENDERBITS1983Carnagetyler82
  • Reply 3 of 20
    red oakred oak Posts: 673member
    Here’s a company that is moving fast and being bold 
    SpamSandwich1STnTENDERBITS1983Carnagetyler82
  • Reply 4 of 20
    SpamSandwichSpamSandwich Posts: 31,309member
    red oak said:
    Here’s a company that is moving fast and being bold 
    Both Bob Iger (head of Disney) and Kevin Feige (head of Disney-owned Marvel) are operating at their peak. Both have turned Disney into a powerhouse.
    Carnage
  • Reply 5 of 20
    mike1mike1 Posts: 1,911member
    Curious how Disney will manage/merge/differentiate Hulu against their own new streaming service.
  • Reply 6 of 20
    SpamSandwichSpamSandwich Posts: 31,309member
    mike1 said:
    Curious how Disney will manage/merge/differentiate Hulu against their own new streaming service.
    They can show competing content and still reap the rewards.
  • Reply 7 of 20
    kelemorkelemor Posts: 2member
    mike1 said:
    Curious how Disney will manage/merge/differentiate Hulu against their own new streaming service.
    Hulu will be adult content and Disney+ will not. The more edgy marvel stuff will stay on Hulu. That and the  package deal of both for like 20 bucks. 
    badmonk
  • Reply 8 of 20
    sanssans Posts: 44member
    I am starting to wonder if it is worth going back to the disc base Netflix. Is that still an option?
    jbdragon
  • Reply 9 of 20
    StrangeDaysStrangeDays Posts: 8,277member
    red oak said:
    Here’s a company that is moving fast and being bold 
    Being bold how? Funneling video content into a consolidated, corporate-controlled channel? Oh boy, I can barely contain my excitement. Why should I care about that as a consumer? If we flip the perspective to investor, Apple is still more successful than Disney, so what's to get excited about there either?
    lolliverjbdragon
  • Reply 10 of 20
    22july201322july2013 Posts: 741member
    As a company, Apple has five times the value of Disney (market capitalization), but I consider Disney the biggest potential threat to Apple over ten years. Disney's media content obviously dwarfs Apple's. Hardware wise, both Disney and Apple sell respectable cameras (iPhone for Apple and GoPro for Disney. Bet you didn't know that one.) I think Disney's next step is ask/compel GoPro to create a hardware product that gets its own media from the internet, a new competitor to Apple TV, Roku, Chromecast, etc. Disney has so much media I think they could kill the competition for video streaming devices.
  • Reply 11 of 20
    22july201322july2013 Posts: 741member
    kelemor said:
    mike1 said:
    Curious how Disney will manage/merge/differentiate Hulu against their own new streaming service.
    Hulu will be adult content and Disney+ will not. The more edgy marvel stuff will stay on Hulu. That and the  package deal of both for like 20 bucks. 
    So you are saying Disney+ will be available to the whole world but edgy stuff will be available only to US customers? The US is only 5% of the world's population.
  • Reply 12 of 20
    rogifan_newrogifan_new Posts: 4,151member
    All these competing services. And now AT&T said they’re removing Warner Media properties (like Friends & ER) off of rival services. Can someone explain why the bundle is such a bad idea? Having all these different subscriptions because there might be one or two shows you like from that content provider. And then live sports is a whole other matter. Seems like subscription fatigue could set in quickly. Yeah my AT&T/DirecTV bill isn’t cheap but I have access to pretty much everything sans Netflix originals and I don’t have to wonder what service a particular show is on and if I can access it everywhere.
    electrosofttyler82mike1
  • Reply 13 of 20
    StrangeDaysStrangeDays Posts: 8,277member
    All these competing services. And now AT&T said they’re removing Warner Media properties (like Friends & ER) off of rival services. Can someone explain why the bundle is such a bad idea? Having all these different subscriptions because there might be one or two shows you like from that content provider. And then live sports is a whole other matter. Seems like subscription fatigue could set in quickly. Yeah my AT&T/DirecTV bill isn’t cheap but I have access to pretty much everything sans Netflix originals and I don’t have to wonder what service a particular show is on and if I can access it everywhere.
    There just isn’t enough meaningful stuff to watch on cable/direc for our household to pay for such a bundle. It’s all you can eat, but it ain’t good. It’s less expensive to watch the shows we find worth paying for via itunes or temporary subscription during their run (ex: paying HBO for a couple months to see GoT and Bill Maher and some features/docs). 

    As for sports, paying billionaires to watch millionaires play sportsball doesn’t hold much value for us. During NFL season we can catch our local team OTA or visit a pub with friends. If trying to save money I just can’t justify investing any more than that, but of course YMMV. 
    edited May 14
  • Reply 14 of 20
    SpamSandwichSpamSandwich Posts: 31,309member
    As a company, Apple has five times the value of Disney (market capitalization), but I consider Disney the biggest potential threat to Apple over ten years. Disney's media content obviously dwarfs Apple's. Hardware wise, both Disney and Apple sell respectable cameras (iPhone for Apple and GoPro for Disney. Bet you didn't know that one.) I think Disney's next step is ask/compel GoPro to create a hardware product that gets its own media from the internet, a new competitor to Apple TV, Roku, Chromecast, etc. Disney has so much media I think they could kill the competition for video streaming devices.
    I think Apple needs to start buying up the content libraries and production facilities of existing studios, such as Sony Pictures. And I say Sony in particular because they have some great older TV and movies, but a relatively weak performing recent string of flops (Into The Spider-verse being a recent exception).
  • Reply 15 of 20
    dysamoriadysamoria Posts: 2,266member
    red oak said:
    Here’s a company that is moving fast and being bold 
    Aiming to be a monopolist. How bold.

    We are going to have nothing but a few monopolists soon, in every industry.
    gatorguylolliverjbdragon
  • Reply 16 of 20
    davgregdavgreg Posts: 422member
    So each company is lining up with an exclusive service and wanting to tap your wallet every month AND serve you commercials.

    No thanks.
  • Reply 17 of 20
    red oakred oak Posts: 673member
    red oak said:
    Here’s a company that is moving fast and being bold 
    Being bold how? Funneling video content into a consolidated, corporate-controlled channel? Oh boy, I can barely contain my excitement. Why should I care about that as a consumer? If we flip the perspective to investor, Apple is still more successful than Disney, so what's to get excited about there either?
    Did you watch both the Apple TV+ and Disney+ presentations? 
  • Reply 18 of 20
    tyler82tyler82 Posts: 877member
    Apple should buy every streaming service and sell everything for $800/ year. 

    They might run into monopoly conflicts though 
    gatorguy
  • Reply 19 of 20
    As a company, Apple has five times the value of Disney (market capitalization), but I consider Disney the biggest potential threat to Apple over ten years. Disney's media content obviously dwarfs Apple's. Hardware wise, both Disney and Apple sell respectable cameras (iPhone for Apple and GoPro for Disney. Bet you didn't know that one.)
    I can’t find anything that says Disney owns GoPro. Where did you see that? Or do you just mean I can purchase a GoPro through Disney somehow?
    edited May 16
  • Reply 20 of 20
    gatorguygatorguy Posts: 20,904member
    As a company, Apple has five times the value of Disney (market capitalization), but I consider Disney the biggest potential threat to Apple over ten years. Disney's media content obviously dwarfs Apple's. Hardware wise, both Disney and Apple sell respectable cameras (iPhone for Apple and GoPro for Disney. Bet you didn't know that one.) 
    Are you talking about the pre-IPO Steamboat Ventures investment in GoPro?
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